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Hi,
TL;DR at the bottom if you don't want to read the whole thing including my personal experience with the challenge and my opinion on the route split + the choice deriving from there.
Yesterday I started a Fire Emblem TSS playthrough with ONLY steel weapons/D-rank tomes and staves. Currently at ch7, so far the beginning was chaotic, since Seth is the only one with a steel weapon and the rank to even use it until ch2, where the *#@! armory doesn't sell steel weapons during the chapter (while it sells them on the global map THAT'S ANNOYING I was 2 uses away from not being able to complete this at all due to steels having 30 uses and chapter 2 being a rout map, BTW it's "rout", not "route", that is used to call a decimation objective, "route" is the way you go).
After ch2 was completed, I could finally sell all of trash weapons and my heal staff to buy 3 steels to Garcia who soloed ch3-4 and 40% of ch5 until Vanessa visited the south-eastern, the western and the north-western villages, baiting the bandits away from Garcia who didn't have any elixir left to heal and finally visited the armory to send steel lances and swords to the supply. After that Gilliam caught up to and left Garcia collecting dust even with less level ups since Garcia's speed is barely better than Gilliam by level 10-20 and Garcia's def is a joke when Gilliam basically doubles it by level 10-12 and only gets better from there, on top of having 0 speed penalty with steel, which makes him about as fast as Garcia in a few level ups.
Franz is unusable, don't bother with him, really, he'll never double with anything other than steel sword and he can't even use them before promo since he starts with a useless E rank in swords. With a steel lance, he can't hit shit and gets a 4 speed penalty. y stat screwed Kyle reached 11 str, 10 spd/def around level 10/11 so he can at least be a passable Duessel light with +1 con to wield steel swords without a penalty and only -1 speed with steel lances after promo.
Vanessa...how to say it, well, until wyvern lord promo, instead of having mediocre accuracy with iron and inexistant damage, she has Franz-level accuracy and -8 speed with steel, so it's like she starts with Gilliam's speed only she has 8 points more in it so she will cap at 12 effective speed after you/I manage to feed her exp while she's really hot garbage (I already have trouble feeding her kills before ch4 in a normal playthrough sine it's axe land with an archer in each one, but here she's a liability more than anything else, for real, 17 HP 6 def 3 speed is 3 HP less than Franz with the same speed, it's unusable). Ephraim while being stuck at 7/8 def around lv 10 has at least 14/15spd to double with steel, which is the best I can hope from a non promoted unit since GBA weight/con system is hot garb (while it may seem logical, it only makes light units a liability since everything above E rank ways them down and lowers massively their generally only tank stat, which is speed for dodge).
So, my combat units (that I of course recommend) are Seth, Garcia since he's the only unit usable from chapter 3 to 5 and a half (thanks IS for this hot garbage that are early game shops, selling slims instead of steel while slim deals no damage and the crit is highly unneeded since most units would deal more with iron or steel without needing to rely on 8% crit chance, and of course the only staves I can buy at this point are torches because ch5 shop doesn't even sell the D rank healing staff, and D tomes are impossible to get at all before like chapter 9 Eirika's route or 10 Ephraim's route so mages are perfectly unusable), Gilliam (#2 after Seth, as I guessed before playing), Vanessa is level 3 and didn't gain a single point of speed so she won't ever fight again, useless unit only good to travel through the map without doing anything out of it except visiting villages. Kyle will soon replace Gilliam as the #2 unit, while Joshua is equal to Garcia since he's faster but takes less of a beating in return for having more chances of killing. Once Moulder promotes into a sage he'll use that juicy Inferno tome in Eirika's route.
Why people say Ephraim's route is harder is beyong me, Duessel nearly solos the phantom ship, trained Ephraim is better than Seth unless Seth is already level 14+ which is unlikekly since if you don't feed him every ennemy on each map he should be lower level, I typically feed him the dodgy ennemies or the ones that are annoying to deal with like the cavaliers on the top-side of ch6 and the Halberd looting fighter for Garcia's contribution later on, still these 3 units are all you need with a pure water per guy to tank the eyeballs, and actually Ephraim!Cormag is garbage until ch12 because ch11 has FoW and mixed magic/phyical damage so he's dying very fast with his garbage speed and shaky con because wyverns have lower con than they should, male wyvern lords having paladin con and male wyvern knights having even less which is ridiculous for dragon riding classes. Really, Ephraim's route is Seth, Ephraim and chosen cavalier storming every map unless you impose yourself a challenge, the only hard to beat map is 14 but still if you're not into full completion of treasures/recruitment then it's actually easie than Eirika's route, since Duessel basically solos the rest of the game at base with a speedwing or 2 to double without the Garm.
On Eirika's route side objectives like getting the 2 villages in ch9 for the 2nd rapier, the dragonshield and the angelic robe bonus, recruiting Marisa without killing Gerik in ch10 (screw sleep staff spammer seriously, may he burn in Hell for a million years over and over) on top of that this chapter has falcon knight+pegasi 5 women formation with a few wielding steel lances to deal actual damage and a stealable talisman that requires you to go out of your way to level up Colm until he has at least 15 speed and can survive 2 hits from steel lance pegasi/the falcon knight and a ruby to steal to the myrmidon near the boss, a ranger with a steel bow who can one shoot Vanessa/Tana I guess unless she's very trained but even then she would die to anything coming at her if she takes a hit from that ranger, namely the pegasi with steel lances who can get her even in the mountains. Ch11 is easier than phantom ship but is annoying due to the map split, ch12 is filler, ch13 sends you a LOT of ennemies all at once a la Awakening, many of which are cavaliers, has 2 or 3 ballistas that you need to seize before you get poked from everywhere and can't use any flier at all, Aias is way harder to beat than LOLSelena who dies to any cavalier effective weaponry, while Aias has HP and def and packs a punch (pure waters give 7 res and you get several for free from the beginning of the game, so magic ennemies are mostly useless for anyone with 5/6 res and enough luck to not eat a bolting/thunder crit).
Also Ephraim's route can promote 2 heroes while Eirika's can only promote one until chapter 14, which means one less promoted unit to play with, it's far more restricting since knight crests are also very restricted with the second being held by Aias himself so not usable before the end of ch13, you are fighting with Seth, Gerik or Garcia or Joshua and one paladin/Gilliam until ch14. Ch14 is also very annoying as unlike Ephraim's, it's a maze where you don't see the stats/formation of the ennemies before you open the door, which is very tricky especially when the bottom-left room has a knight guarding 4 or 5 shamans, so you need a really tanky unit to survive that or you have to disarm the facing unit and kill the knight after the ennemy turn and then clear the shamans. All in all I think Ephraim's route is much more reliant on stats while Eirika's relies on strats. And Duessel is RNG-proof, while Innes and Saleh don't have such an insanely easy ennemy phase (Duessel literally takes 1 pure water, 1 elixir/potion and 3 hand axes and solos the game from ch 11 onwards with 0 investment and berserk doesn't hurt him much since he doesn't have eight move to come at your team and kill it like Seth would).
So I chose Eirika's route, because it's less of a slugfest and there are more monsters for my steel party to kill (on top of that, I can let Eirika rot on someone's horse so she'll never be able to cause me a Game Over, while Ephraim would be wasted if he was left to collect dust, and Ephraim's route ch 15 is very easy to screw up with Eirika's starting position and her inexistant stats to survive wyverns), and Innes and Saleh will see use as the first useful archer at base and the first mage who has instant access to D rank weapons at a time he can actually buy them. I'll certainly feed a robe and a dragonshield to Saleh so he can be as good as Franz on EP. Saleh is like the only unit that can use a 1-2 range weapons with stats that make it useful without grinding if you can't use E-ranks at all like in this challenge.
Syrene will be useful with a steel sword and a pure water to hunt magic users and doesn't need anything other than her base stats and pure water to take negative damage from any unpromoted magic ennemy, she could maybe even take out the Fimbulvetr sage with a pure water, but I'm not sure, I don't have his stats and Fimbulvetr's damage in mind.
Of course the fina boss will be killed with legendary weapons since it's impossible otherwise without luck (pierce activation) and Shine with slayer doesn't even scratch him unless it's capped magic but no one will have capped magic as a bishop in a grindless playthrough.
That's it, I gave the challenge and my choices/advice.
TL;DR: Never use anything (edit) OTHER (end of edit) than steel weapons, D-rank staves and D-rank tomes except for the final boss, good luck. Gilliam will save your ass, try not to overlook him for once, since Franz and Vanessa are useless with steel lances only available from chapter 5 onwards and steel swords requirind D rank Franz doesn't even have at base. Basically both have Gilliam's speed, but neihter of them has HP or defense to take hits and even less to take double attacks. The only things Vanessa can last hit/OHKO are Mogalls and soldiers/mercenaries. Everything else she should stay far away from. Don't bother raising your pegasi. Kyle is the only worthy cavalier as a steel locked unit.

Anybody able to help me out here? If you know a good place to find the single sheet for Ross' portrait from fe8, I'm gonna use it to practice with and I know there are sheets that carry all of the seperate portrait frames, but I have no idea what they're called.